Jadestone Energy Share Discussion Threads

[basem1] 08/10/2018 08:40

Realistic price target of ? £1 ??

[zengas] 08/10/2018 08:37

Montara 10,300 bopd.
Stag 3,600 bopod.

Total 13,900 bopd and at $80/b = $400m+ revenues.

Stag infill well this quarter with an estimated initial additional 1,200 bopd.

This quarter Ogan Kommering ('OK') PSC expected to complete.
Should add circa 1,000 bopd and 400 boepd gas if 'OK' on same terms as previous.

'Jadestone’s net 50% working interest share of production from the Ogan Komering PSC, held up until May 20, 2018, averaged approximately 1,500 boe/d and is weighted approximately 66% oil and 33% gas.'

'Jadestone, as the prior partner in the PSC with Pertamina, has been directed to proceed with direct negotiations for participation in the new Ogan Komering Gross Split PSC with Pertamina.'

'The 1,155 km2 Ogan Komering PSC is located onshore South Sumatra, Indonesia. This area benefits from extensive infrastructure and growing local energy demands.'

Above should lift oil production to 16,000 bopd + 4-500 boepd gas.'

If 'OK' proceeds as expected - it will also add an uplift in reserves and 2C as these were not in the CPR.
Contains 3 gas discoveries to develop and significant exploration upside.

Coming year 2 further infill wells at Stag and 2 at Montara.

All while progressing the Nam Du and U Minh gas fields to development next year.

September Presentation.

[highly geared] 08/10/2018 08:22

Hopefully the market is realising that with the share price at around 1/3 net present value ( based on POO at lower levels and without the operational efficiencies to be driven out by the JSE team) that there’s tremendous value here. The Aus assets are producing around 14,000bopd and should be at 15,000+ by year end. Other assets to be developed in 2019 into a buoyant oil and energy market. Timing is everything....

[mount teide] 08/10/2018 08:06

L2 - moving up: 2(20K) v 2(15k) / 44.0p v 45.0p

[mount teide] 05/10/2018 16:28

L2 strengthening: 2 v 1 / 43.4p v 44.0p (rest 45p or above)

[mount teide] 03/10/2018 09:11

someuwin - it was a first and very modest attempt at setting up a basic thread with charts.

You're clearly highly talented at setting up ADVFN threads with more than just the basic header and charts - how about you creating a new more detailed 'stock related' thread for us all using a copy of this threads header text etc?

[someuwin] 03/10/2018 08:37

MT - why not start a new thread and make it 'Stock Related' rather than 'commodities related' otherwise many people won't see this thread unless they have 'commodities' selected.

You can just copy the header text from this thread to the new one.

[spangle93] 03/10/2018 01:26

That excerpt wouldn't be from Linkedin wouldn't it, Mount T ;-)

If so, you missed off his OBE !!

If you dug through the various roles pre-Talisman, there's an eclectic mix, from geologist through drilling engineer to operations manager, to country manager.

No project management though - couldn't find one at Jadestone on LinkedIn or in their senior management on their website. I would bet that whoever it is would be ex-Talisman, who were very competent at executing projects, but odd that no names come up

[mount teide] 03/10/2018 00:49

Spangle - take your point.

Paul Blakeley's outstanding track record managing oil company businesses in the North Sea and SE Asia is what led JSE's three activist hedge fund shareholders to recruit him and his team from Talisman Energy. So he certainly came well regarded and its encouraging that the hedge funds went for someone with long experience of successfully turning around underperforming businesses/assets.

Blakeley's bio certainly reads well:

A business leader with thirty-five years in upstream oil & gas, and an extensive background and capability in all aspects of upstream operations and integrated processes.

Demonstrated track record of building and leading successful businesses, and delivering exceptional outcomes from organisations.

• Demonstrated track record of turning around underperforming businesses to become top performers in the industry.

• Consistent history in adding value, and has generated up to USD7 – 10 billion in net present value to an organisation.

• Built and lead large businesses up to USD5 billion in annual revenue, and 2000 employees, both across Europe and Asia Pacific/Australia, yet remains grounded to the details of technical excellence, cost and efficiency.

• Has an entrepreneurial style with a reputation for upstream knowledge and capability in both the industry and investment community, taking a strategic approach to decision-making and with a bias for results.

[spangle93] 02/10/2018 22:42

Mount T - ref your admissions doc

"cutting sustaining capital expenditure and stabilising production" - all well and good, but sustaining capital is typically the money that is spent on maintenance projects that keep offshore installations safe.

I would have preferred them to have written "cutting the cost of sustaining capital projects", or "executing sustaining capital projects more efficiently". Let's hope that's what they meant.

The E&P industry has a mixed track record of executing greenfield capital projects, usually not meeting its target at FID on at least one of cost, schedule, and producibility. Its record on modification projects is worse, and is only topped in the Dire tables by its performance on sustaining capital projects, which individually are much smaller in $$s but collectively account for a significant chunk of annual expense.

If they can indeed carry out such projects on time and on budget, they will be top quartile.

[basem1] 02/10/2018 19:33

Edit DGOC. Not DCOG

[basem1] 02/10/2018 19:30

Exciting times at present. Best oilers imo at present. Fully funded significant upside and not too reliant on exploration. GENL RRE DCOG JSE Higher risk MATD PMG and I3e

[highly geared] 02/10/2018 19:16

Interesting!

Even assuming a conservative 15,000BOPD, 300 days production and a $35 operating cost differential, this generates $157.5 million net revenue ( ex G&A) and assuming similar metrics for Montana.

So, c. £120 million net revenue.

They are likely to be at c 20,000BOPD by this time next year which will smash the above figures out of the park if Brent stays around current levels.

Seems a steal at current levels?

[wanobi] 02/10/2018 19:08

MT, think I'll have some of these too,,, many thanx, cheers Wan

[mount teide] 02/10/2018 17:38

The Admissions document highlights well the potential Montara holds to increase production and reduce operating costs once JSE takes over as operator - currently expected by year end.

However, JSE's material 2019 production growth and cost saving targets for Montara could well prove conservative if the very modest performance of the existing field and FPSO operator is a reliable guide. And with a 3-5 year asset development plan based on $55 oil the Montara acquisition timing looks inspired.

Admission Document - Montara

'The Company has already identified multiple operational improvements at the Montara Assets and believes it can execute these improvements to increase production, whilst also reducing fixed operating costs by up to 20%. The Company has already made significant cost savings at Stag, reducing fixed operating costs by 35%, cutting sustaining capital expenditure and stabilising production. The Company is now focused on increasing production at Stag through drilling infill wells over the next two years and completing well workovers.

The limited number of qualified offshore operators in Australia looking to deploy second phase specialisation, and Jadestone’s recently proven ability to obtain regulatory approvals, in particular approval as operator culminating in the transfer of operatorship of Stag in July 2017, proved a significant competitive advantage when engaging with the seller.

Reflecting on the savings obtained at Stag to date, the Company is confident of its ability to deliver significant additional value creation at the Montara Assets following a successful transition period and subject to the required investment by the Company.'


The analysis below of the trend between the price of Brent and the operating cost per bbl of the Stag Field gives some good insight of Montara's potential under JSE as operator.

In H1/2017 the Stag Field under the previous operator saw the differential average $8.00, rising to $24.00 in H2/2017 under Jadestone operatorship, and $43.50 in Q2/2018 (all rounded to nearest 0.50 cents). At current Brent pricing it will be close to $55.00 inclusive of the $2.50 regional price premium to Brent.

Brent average Prices
$39.00 - H1/2016
$48.50 - H2/2016
$51.50 - H1/2017 - Stag Op Cost/bbl: Q1($45.84)/(Q2/$41.23) - Previous Operator
$56.50 - H2/2017 - Stag: Q3($32.99)/Q4($32.15) - Jadestone as Operator
$66.75 - Q1/2018 - Stag: Q1($34.27)
$76.50 - Q2/2018 - Stag: Q2($33.09)
$85.00 - Current Spot Price


AIMHO/DYOR

[ifthecapfits] 02/10/2018 15:27

Yes i get that - but don't have the cash yet!

[highly geared] 02/10/2018 15:15

The move up has hardly started ITC. If everything comes together and oil stays above $80 for a prolonged period, Zengas valuation of 200p will look conservative. Potential 5 bagger over 18 months from here as materially undervalued to NPV of assets.

[ifthecapfits] 02/10/2018 14:13

Well done holders. I had this on my watch list and was waiting funds to arrive. Annoying.

[mount teide] 02/10/2018 13:47

L2: 3(45,000) v 1(7,500) / 43.0p v 44.0p

[mount teide] 02/10/2018 13:06

L2: 3 v 1 / 42.6p v 43.0p (2 on 44.0p rest of 44.6p or above)

[zengas] 02/10/2018 08:59

With oil at $80+ there is an even greater disconnect re value.

Montara and Stag are now significant cash cows and no doubt that this will now help in getting further acquisitions from the majors offloading non core Asian fields of both production and existing discoveries.

Investor presentation valuation of some £655m based on $66/b for 2018, $67/b 2019 and $68/b thereafter (page 6).

Montara NPV $479.5m (£355m).
Stag $84.2m (£62m).
Nam Du $226m (£167m).
U Minh $96m (£71m).
Total $885.7m (£655m). Excludes OK PSC. Using ex rate £1=$1.35.
Very significant $3billion adjustment to offset re Montara.



At $66-$68/b oil - the £655m valuation is 142p/share.

Ogan Komerang 1155 km2 PSC to be ratified this quarter which is a sizeable producing asset and which isn't included in the CPR nor in the valuation.

Should be a 20% uplift in forward production numbers from infill drilling and new reserves classification across Montara/Stag.

With 'OK' production PSC to come and 2 other assets in the portfolio with no CPR valaution + a further acqusition this imo has potential for 200p of value creation using just the $66-$68/b oil price range.

[highly geared] 02/10/2018 08:52

Read the header notes which are extracted from the latest JSE presentation. £655 million NPV versus a current market cap around £200 million.
JSE will drive operational efficiencies at Montara and their other assets + we will see cash flow / profit leverage from the high POO if it remains over $80.
JSE are pumping c 14,000Bopd from the Aus assets and this will increase over the next 6 months in line with the FDP. 14,000 x $80 x 300 ( days)= $336,000,000 gross revenue...

[wanobi] 01/10/2018 22:48

Brasso3, I don't think you've posted on JSE so I'll continue to post here if that's ok with you? Thanks, cheers Wan